Labor Day car shoppers find low inventory as microchip shortages leave dealerships empty – CBS San Francisco

Walnut Creek (KPIX) – Earlier it was toilet paper, now COVID-19 is causing shortage of computer chips and this Labor Day is wreaking havoc with the car buying tradition as well as the automobile industry.

On a typical Labor Day, Walnut Creek Toyota’s sales lot would be filled with new cars and customers taking test drives. But on Monday, the huge storage lot near the dealership was completely empty.

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“In a normal year, that’s a lot, we wouldn’t stand in it,” said general sales manager Keith Hernandez. It will be filled with 200-250 cars. As you can see, we don’t have any today.”

This is because the pandemic has shut down many foreign factories that produce parts and, in particular, the microchips that control all aspects of modern cars. In fact, General Motors on Monday closed nearly all of its North American assembly plants due to a shortage of parts.

Normally, Toyota Walnut Creek will have about 300 new cars on hand. He had ten on Monday.

“It’s shocking,” said car shopper Ricky Shore. “I’ve heard reports about limited inventory, but when you really look at it, and look at all these holes in the parking lot, it really hits home.”

Shor wanted a new car but was looking for some used ones. Pre-owned cars are like gold to dealers right now and, in some cases, new cars are selling for more than if they exist, which they don’t. Hence buying used cars has become as important for dealerships as it is for selling new cars.

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“And we’ll be paying a lot more for that car than we should, because we see that pipeline going downhill right now until the end of the year,” Hernandez said. “So, yes, please bring your car here, if you have a spare car!”

The dealership says it has kept the price of the new vehicles constant, one dollar below the manufacturer’s suggested retail price.

Karen Pratt was one of the rare people to get a new car this Labor Day, but only because she ordered it two months ago and it was due on Monday.

“I would have loved to be able to test drive one, you know, but they just didn’t have them. They go in and out so fast,” she said.

This is yet another new reality brought on by the pandemic. The chance to kick tires is gone as new car buyers place orders on the factory website and wait for their delivery. The same is happening at every car company and every dealership in the US and they say the situation will not improve until COVID is under control and factories can return to full production.

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“It’s just animal nature right now, you know, because of COVID and everything,” Pratt said. “It’s just the way we’re operating our businesses.”

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